Supermarket boss Sir Ken Morrison has pledged the fight for Safeway will continue.

The stores supremo told shareholders at the Hanover International Hotel in Bradford he was "surprised and disappointed" the initial bid in January did not get through.

But he is still convinced the Morrisons/Safeway takeover would be "in the best interests of the shopping public".

He said after yesterday's meeting: "I can't understand why we did not get the offer in the first place."

He added: "There are a lot of good people in Safeway and they would fit in well with our team."

But he said everyone was waiting to hear what the Competition Commission decides should happen.

"We are well prepared. What the future is I am not quite sure.

"Our chances are unchanged. We are waiting to see what they will decide."

Since Morrisons triggered the supermarket war, Asda, Sainsbury and Tesco have also shown an interest.

Asked what his chances were if he was a betting man Sir Ken was keeping tight-lipped, replying: "I am not a betting man."

But he said whatever the outcome they would be looking to "develop the company in the fashion we want to develop it.

"We are not interested in other areas. We are looking at large stores."

If unsuccessful, he said, they would still look for sites in the south to further expansion plans.

This year was the 36th successive year of rising sales and profits. Sales are up 14.2 per cent in the first 14 weeks of this financial year and Sir Ken said that despite all the high-profile takeover wars it was "business as usual".

"Our eyes are firmly on the ball. We have stuck to what we excel at and worked hard to satisfy customers both old and new," he said.

Morrisons' share of the market in March was 6.2 per cent - an all-time high - and it employed 48,500 people across the company. Seven new stores were opened last year, creating 2,000 new jobs, and a further 15 are planned during 2003/04 including Liverpool, Bristol and Scotland.

Every member of staff received on average £498 from the company profit sharing scheme. Overall the company made an operating profit of £262 million, 14.2 per cent up on last year.

He said: "Win, lose or draw the Safeway saga, we have a strong company, well equipped to continue to prosper in these increasingly competitive times.

"I view the future with much confidence and look forward to another year of good, steady progress."

Shareholder Ian Charnock from Brighouse said the bid for Safeways was good but the decision to refer it to the commission was "unfortunate" .

But he was full of praise for Sir Ken's leadership.

"He is a very good boss. He is firm, hardworking," he said.